Redfin: Home Prices Jumped in February as Sales Were Constrained by a
Double-Digit Inventory Dip

Affordability Pressures Mount amid Rising Mortgage Rates

March 16, 2017 08:00 AM Eastern Daylight Time

SEATTLE--(BUSINESS WIRE)--U.S. home prices rose 7.2 percent in February, which marked 60
consecutive months of annual increases since home prices bottomed in
early 2012, according to Redfin (www.redfin.com),
the next-generation real estate brokerage.

Home sales gained a modest 1.8 percent, constrained by a continuing
inventory shortage. The number of homes for sale fell 12.9 percent year
over year in February, the third month in a row that inventory declined
by double digits. Housing affordability pressures are increasing,
especially for first-time buyers, amidst continuously increasing prices
and the Federal Reserve’s recent announcement of an interest rate hike.
However, rising prices may lead more homeowners to list their homes this
spring.

“The total level of home equity reached a new peak at the close of 2016,
according to recent Fed data,” said Redfin chief economist Nela
Richardson. “While great for homeowners, continuously strong price
growth across the U.S. since 2012 has posed significant challenges for
first-time buyers, especially given such low supply in affordable
price-tiers. There is a silver lining on the horizon, however. Rising
prices and increased equity may tip the scales for homeowners who have
been delaying their decision to move up, which could add much-needed
starter-home inventory to the market.”

Despite affordability concerns and low inventory, February still proved
to be a strong month for buyer demand. Market speed increased again,
making for the fastest February Redfin recorded since 2010. The typical
home that sold last month went under contract in 60 days, eight days
faster than one year prior. Nearly 15 percent of all homes listed for
sale in February were off the market within two weeks, up from 11.7
percent last year.

Regional February Highlights

Competition

Seattle, WA was the fastest market, with nearly half of all homes
pending sale in just 12 days, down from 13 days from a year earlier.
Oakland, CA and Denver, CO were the next fastest markets with 15 and
18 median days on market, followed by San Jose, CA (21) and San
Francisco, CA (28).

Competition was fierce in San Jose, CA where 63.1% of homes sold above
list price, followed by 62.0% in San Francisco, CA, 59.1% in Oakland,
CA, 49.3% in Seattle, WA, and 36.3% in Tacoma, WA.

Prices

Portsmouth, NH had the nation’s highest price growth, rising 21.4%
since last year to $285,000. Deltona, FL had the second highest growth
up 20.1%, followed by Tampa, FL (18.8%), Jacksonville, FL (18.7%), and
Ogden, UT (17.2%).

17 out of 90 metros saw sales surge by double digits from last year.
Charleston, SC led the nation in year-over-year sales growth, up
39.2%, followed by St. Louis, MO, up 30%. Fort Myers, FL rounded out
the top three with sales up 25.2% from a year ago.

Albany, NY saw the largest dip in sales since last year, falling
22.5%. Home sales in Portsmouth, NH declined by 22.4% as well.

Inventory

Rochester, NY had the largest decrease in overall inventory, falling
42.4% since last February. Buffalo, NY (-37.8%), Seattle, WA (-35.3%),
and Omaha, NE (-34.7%) also saw far fewer homes available on the
market than a year ago.

Provo, UT had the highest increase in the number of homes for sale, up
30.7% year over year, followed by Knoxville, TN (21.6%) and New
Orleans, LA (16.1%).

Redfin (www.redfin.com)
is the next-generation real estate brokerage, combining its own
full-service agents with modern technology to redefine real estate in
the consumer's favor. Founded by software engineers, Redfin has the
country's #1 brokerage website and offers a host of online tools to
consumers, including the Redfin
Estimate, the automated home-value estimate with the industry's
lowest published error rate. Homebuyers and sellers enjoy a
full-service, technology-powered experience from Redfin real estate
agents, while saving thousands in commissions. Redfin serves more than
80 major metro areas across the U.S. The company has closed more than
$40 billion in home sales through 2016.

For more information or to contact a local Redfin real estate agent,
visit www.redfin.com.
To learn about housing market trends and download data, visit the Redfin
Data Center. To be added to Redfin's press release distribution
list, subscribe
here. To view Redfin's press center, click
here.